Investment advice
February Spring Festival + Valentine’s day and March 8th are the traditional peak sales seasons of gold and jewelry. From the perspective of terminal research and online data tracking, the overall sales are beautiful and grow rapidly in the same period. In particular, the sales of refined gram heavy gold jewelry are high. Under the current international situation, the rise of gold price + strong demand for pleasing oneself are dominated by gold sales Jewelers with growth driven by category upgrading and channel expansion. It is suggested to pay attention to the subject matter of Guangdong Chj Industry Co.Ltd(002345) / Chow Tai Seng Jewellery Company Limited(002867) .
The conflict between Russia and Ukraine disturbs the supply of natural diamonds and the price of finished diamonds rises sharply, while the global demand for diamonds is still strong. Natural diamond traders may turn to cultivating diamonds, cultivating diamonds or accelerating penetration. It is suggested to pay attention to the global leader in high-quality HTHP production Henan Liliang Diamond Co.Ltd(301071) / North Industries Group Red Arrow Co.Ltd(000519) / Henan Huanghe Whirlwind Co.Ltd(600172) .
Market Review
This week, the Shanghai Composite Index, the Shenzhen Component Index and the Shanghai and Shenzhen 300 fell 4.00%, 4.40% and 4.22% respectively, and the diamond and jewelry sector fell 4.55%, outperforming the Shanghai and Shenzhen Hithink Royalflush Information Network Co.Ltd(300033) pct. In terms of sector comparison, diamond jewelry is located in the middle and lower reaches of the industry. In terms of individual stocks, Shenyang Cuihua Gold And Silver Jewelry Co.Ltd(002731) , Henan Liliang Diamond Co.Ltd(301071) , Leysen Jewelry Inc(603900) led the increase, and Beijing Worldia Diamond Tools Co.Ltd(688028) , Fiyta Precision Technology Co.Ltd(000026) , Chow Tai Seng Jewellery Company Limited(002867) led the decrease.
This week’s topic
The further escalation of sanctions against Russia has increased the uncertainty of the upstream supply of natural diamonds. On March 11, US President Biden signed an executive order prohibiting the United States from importing non industrial diamonds and other commodities from Russia. It remains to be seen whether the scope of the import ban is direct import or origin traceability. Russia is the largest producer and exporter of natural diamonds in the world. In 21 years, the output of natural diamond rough in Russia accounted for 32% of the world, with an output of more than 37 million carats. With the increase of European and American sanctions against Russia and the extension of time, the uncertainty of global upstream supply of natural diamonds has increased, or structural changes have taken place, forming two systems of Russian diamonds and non Russian diamonds, affecting the whole natural diamond industry chain and changing the existing business status of the middle and downstream.
Industry dynamics
Industry news: 1) China: due to the impact of the new wave of epidemic, the sales of hard luxury goods such as jewelry, watches and precious gifts in the Hong Kong SAR in January 22 reached the lowest level in a year, only 7%, down 20 percentage points month on month; In March 9th, the Kwai further clarified the entry category of jewelry and released the announcement of the “jewelry / jewelry category entry / restricted sale rules”. 2) Abroad: inflation and geopolitical risks remain high. In February, gold achieved its strongest rebound since May 2021. At the end of the month, it closed at US $1910 / ounce, up more than 6%; Gembridge, an international color gem online trading platform, has reached a cooperative relationship with diamond bird, an online jewelry retailer in China; The sales of platinum jewelry in India increased by 35% – 40% year-on-year in the fourth quarter of 2021; Alrosa suspended funding for NDC.
Key announcement: Mclon Jewellery Co.Ltd(300945) February added a new direct store (Saige counter in Xi’an, Shaanxi Province), with an investment amount of 9.7205 million yuan North Industries Group Red Arrow Co.Ltd(000519) wholly-owned subsidiary northern Hongyu “XX machining production line technological transformation project” has reached the scheduled use status. The project has raised funds and committed investment of 314149 million yuan, and actually completed the investment of 303328 million yuan Sinomach Precision Industry Co.Ltd(002046) hexahedral press will have a capacity of about 200300 sets in 2021.
Risk tips
Terminal retail is less than expected; The price of upstream cultivation drilling and expansion fell; Gold price fluctuation; Industry competition intensifies.
